Financial Comparison: Costco Wholesale (COST) vs. Ollie’s Bargain Outlet (NASDAQ:OLLI)

Share on StockTwits

Ollie’s Bargain Outlet (NASDAQ: OLLI) and Costco Wholesale (NASDAQ:COST) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Ollie’s Bargain Outlet and Costco Wholesale, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ollie’s Bargain Outlet 2 5 8 0 2.40
Costco Wholesale 0 5 20 0 2.80

Ollie’s Bargain Outlet presently has a consensus price target of $68.33, suggesting a potential downside of 5.75%. Costco Wholesale has a consensus price target of $201.47, suggesting a potential downside of 3.59%. Given Costco Wholesale’s stronger consensus rating and higher possible upside, analysts plainly believe Costco Wholesale is more favorable than Ollie’s Bargain Outlet.

Dividends

Costco Wholesale pays an annual dividend of $2.28 per share and has a dividend yield of 1.1%. Ollie’s Bargain Outlet does not pay a dividend. Costco Wholesale pays out 39.2% of its earnings in the form of a dividend. Costco Wholesale has raised its dividend for 14 consecutive years.

Volatility and Risk

Ollie’s Bargain Outlet has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500. Comparatively, Costco Wholesale has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Earnings & Valuation

This table compares Ollie’s Bargain Outlet and Costco Wholesale’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ollie’s Bargain Outlet $1.08 billion 4.20 $127.59 million $1.25 58.00
Costco Wholesale $129.03 billion 0.71 $2.68 billion $5.82 35.91

Costco Wholesale has higher revenue and earnings than Ollie’s Bargain Outlet. Costco Wholesale is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ollie’s Bargain Outlet and Costco Wholesale’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ollie’s Bargain Outlet 12.36% 12.06% 8.81%
Costco Wholesale 2.16% 24.67% 7.52%

Insider and Institutional Ownership

90.0% of Ollie’s Bargain Outlet shares are held by institutional investors. Comparatively, 71.4% of Costco Wholesale shares are held by institutional investors. 20.3% of Ollie’s Bargain Outlet shares are held by company insiders. Comparatively, 0.7% of Costco Wholesale shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Costco Wholesale beats Ollie’s Bargain Outlet on 10 of the 17 factors compared between the two stocks.

About Ollie’s Bargain Outlet

Ollie's Bargain Outlet Holdings, Inc. operates as a retailer of brand name merchandise. The company offers food products, housewares, books and stationery, bed and bath products, floor coverings, electronics, and toys; and other products, including hardware, personal health care, candy, clothing, sporting, pet and lawn, and garden products. It provides its products primarily under the Ollie's, Ollie's Bargain Outlet, Good Stuff Cheap, Ollie's Army, Real Brands Real Cheap!, Real Brands! Real Bargains, Sarasota Breeze, Steelton Tools, American Way, and Commonwealth Classics names. As of April 2, 2018, the company operated 274 store locations in 21 states across the Eastern portion of the United States. The company was formerly known as Bargain Holdings, Inc. and changed its name to Ollie's Bargain Outlet Holdings, Inc. in March 2015. Ollie's Bargain Outlet Holdings, Inc. was founded in 1982 and is headquartered in Harrisburg, Pennsylvania.

About Costco Wholesale

Costco Wholesale Corporation, together with its subsidiaries, operates membership warehouses. It offers branded and private-label products in a range of merchandise categories. The company provides dry and packaged foods, and groceries; snack foods, candies, alcoholic and nonalcoholic beverages, and cleaning supplies; appliances, electronics, health and beauty aids, hardware, and garden and patio products; meat, bakery, deli, and produces; and apparel and small appliances. It also operates gas stations, pharmacies, optical dispensing centers, food courts, and hearing-aid centers; and engages in the travel business. In addition, the company provides gold star individual and business membership services. As of September 3, 2017, it operated 741 membership warehouses, including 514 warehouses in the United States, Washington, District of Columbia, and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 26 in Japan, 13 in Korea, 13 in Taiwan, 9 in Australia, 2 in Spain, 1 in Iceland, and 1 in France. Further, the company sells its products through online. The company was formerly known as Costco Companies, Inc. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

Receive News & Ratings for Ollie's Bargain Outlet Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ollie's Bargain Outlet and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply